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Loan Modification
A Loan Modification is a permanent change in
one or more of the terms of a loan allowing the loan to be
reinstated resulting in a lower payment that the borrower can
afford. In most cases a homeowner in need for mortgage help will
indeed qualify for a loan modification.
See if you Qualify - Apply Now.
To ensure that you understand what a loan modification will actually
do for you, consider the following facts:
- A loan modification is indicated when the
original loan that is secured by a residence has terms that make
it impossible for the homeowner to continue making the payments,
thus risking the loss of the residence.
- Loan modifications are not the same as debt
consolidations, refinancing loans, or even forbearances.
Instead, they are long term solutions for rising interest rates
or other hardships that are threatening to overwhelm the budget
of a homeowner.
- Loan modifications stop foreclosure
proceedings and instead reinstate the loans as they are being
modified.
There are some other facts that explain why lenders
are actually in favor of working with borrowers and their legal
specialists in order to negotiate equitable loan modifications.
- All or portion of the outstanding principal
and interest, past due escrow, late fees, and even costs may be
rolled into the loan modification and thus will not be lost
revenue to the lender. Since they are spread over a long period
of time, they do not pose a problem to the borrower.
- Modified mortgages may use a step rate
approach or an extended term methodology to provide for the
repayment of the due and past due funds. The lower payments
ensure the repayment by the borrower while to the lender the
added time is actually money in the bank in terms of yet to be
earned interest due.
- Foreclosure is avoided and even though banks
routinely foreclose on properties and sell the homes to other
buyers for a fraction of a price, the slowing housing market has
made it difficult for banks to unload such properties and then
recover any additional funds from the previous homeowners. Loan
modification is a fiscally much more attractive solution for any
lender.
- A modified loan protects the credit rating of
a borrower and it also helps lenders in showing less defaulting
loans in their portfolio. This of course makes a good impression
when the financial institution is wooing potential investors.
If you think you qualify,
Act Now!
Here are the requirements you must meet in order to be considered a
good candidate for a loan modification process to be started on your
behalf:
- Your monthly mortgage must be affected by a
verifiable reduction in income.
- It is required that you are currently
employed or have another source of a stable and predictable
monthly income that is provable.
- The home for which you are seeking to obtain
a loan modification must be your primary residence.
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